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By Justin PopeAssociated Press • Tuesday January 15, 2013 10:57 AM

Parents who are footing more of the college tuition bill for their children give them a better
chance of graduating. But a surprising new study finds they may not be doing them any favors in
another area - generous financial support appears to lead to lower grades.

The study, published in this month's
American Sociological Review, suggests students with some of their own "skin in
the game" may work harder, and that students with parents picking up more of the tab are free to
take on a more active social and extracurricular life. That may be fun and even worthwhile, but
comes at a cost to GPA.

"It allows for a lot of other activities in college that aren't academic," said author Laura
Hamilton of the University of California, Merced. "Participation in the social scene is expensive -
money to hang out, drink." But "the more you have all these extras, the more you can get dragged
into the party scene, and that will drag down your GPA."

The study is based on figures from three large federal data sets that allow parental
contributions and grades to be compared. Hamilton controlled for family socio-economic status,
allowing a comparison of similar students whose families make different choices about how much of
the cost of college to pick up.

The effect on GPA is relatively small, Hamilton said. "The reason it was so shocking,
however, is that all the research on parental investments from pre-school through (college) assumes
you give something to your kids, particularly money, it leads to good things. This is one case
where it not only doesn't have the expected good effect, it has a small negative effect."

When parents pick up greater absolute amounts and shares of college costs, it affects GPA
across the income distribution, though the effect is steepest at families earning over $90,000. At
that level, and controlling for other factors, parents not giving their children any aid predicts a
GPA of 3.15. At $16,000 in aid, GPA drops under 3.0. At $40,000, it hits 2.95.

While rich families obviously find it easier to contribute, poorer families do as well, at
greater sacrifice. But Hamilton says the damage may be greater for those families, because lower
GPAs don't hurt better-off students as much in the job market. Wealthier students can rely on
connections and further help from parents.

Students without those connections "have to have the 3.0 in order to pass the initial resume
glance," she said.

Hamilton found grants, scholarships, work-study, student employment and veterans benefits
don't have similar negative effects on GPA, though loans do, along with direct parental aid. She
suggests that's because loans and unconditional parental grants have no immediate strings attached,
whereas scholarships and grants often carry GPA requirements. There may also be a psychological
effect. With grants, "students feel like they've earned them in some way" and want to justify them.

Hamilton said the findings don't suggest parents should stop supporting students financially,
especially considering there is a larger positive effect on graduation rates than the negative
effect on GPA. But they should lay out standards and expectations. And even if parents can afford
the whole bill, it may be worthwhile to make students put up some of their own funds, or work
part-time, so they feel invested.

In her broader research on the topic, Hamilton says she's found some parents signal it's OK
to take advantage of their support for a more social experience.

"Some parents were 100 percent complicit in this," she said. "They absolutely wanted their
children to go to school and party hard. They told me explicitly it's not about grades, it's about
having fun, the best years of your life."

"Now for some families it all works out OK," she said. "The `best years of your life' idea
has trickled down to what everybody thinks college should be. But not everybody can afford for
college to be like that. And they pay for that for a long time."